By David Cameron
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Extra resources for Globalization And Self-Determination: Is The Nation-State Under Siege? (Rotledge Studies in the Modern World Economy)
Analyses that do not take into account the prior level of the dependent variable may mistake what in fact are spurious relationships between the dependent variable and one or more independent variables for causal relationships, particularly when the variables under consideration are serially correlated. In contrast, analyses that seek to account for change in the dependent variable and control for the previous level of the dependent variable not only eliminate the potential problem of autocorrelation but apply a rigorous standard as the basis of causal inference, by requiring that the variation over time and across the countries in the magnitude of the change in the dependent variable be systematically associated with the variation across time and across the countries in the independent variable after controlling for the covariation that exists across time and space between the dependent variable and the other independent variables.
2 In some of the countries, citizens and governments have long been accustomed to dealing with the vagaries and uncertainties created by a high degree of dependence upon international markets, producers and investors – indeed, long before “globalization” became a part of everyday discourse. In others, the discovery that the performance of the economy depends to a considerable degree upon international actors is a more recent phenomenon. But in all – even those which are least dependent on international markets, producers and investors – openness has become a fact of contemporary economic life.
9 Surprisingly, when scholars have examined the effect of trade openness on the relative size of government they have restricted their attention to the extent and/or change over time in the relative share of GDP represented by exports and imports. As a result, they have failed to consider the effects of the difference between exports and imports – that is, the Balance of Trade – and changes over time in the Balance of Trade. Yet it is more plausible to think that if openness does in fact affect the size of government – for example, in inducing government to protect or compensate those who might be or in fact have been adversely affected by trade – it does so because of imbalances between exports and imports – speciﬁcally, a large and/or deteriorating trade deﬁcit – rather than because of the aggregate volume of trade or change in that volume.